The agreement follows the principle of “whoever orders, pays.” In the future, the federal government will cover 80 percent of additional costs when new or amended benefit laws burden states and municipalities by more than 200 million euros, Lies said after the consultations. The new regulation takes effect on September 1.
Rhineland-Palatinate’s Minister Gordon Schnieder (CDU) estimated the relief potential for municipalities at three billion euros as early as 2027, with an upward trend. “We are already talking about a relief potential for municipalities of three billion next year, and that will increase over the coming years,” he said. Merz spoke of a “new chapter of federal, collegial, cooperative cooperation.”
The reform is driven by sharply rising social spending by municipalities, for example on child and youth welfare, integration assistance, and the Participation Act. Municipal umbrella associations had warned that the budgets of many cities and towns were collapsing – for the second consecutive year with a deficit of 30 billion euros. Tax laws are exempt from the new regulation.
Source: www.zeit.de
